| A group of investors spearheaded by Appaloosa | | | | The auto parts supplier is asking the bankruptcy court |
| Management LP will invest up to $2.55 billion into the | | | | to quickly approve the plan. A hearing is expected |
| Delphi Corp., clearing the way for the bankrupt parts | | | | within two to four weeks. Bankruptcy, meanwhile, is |
| maker to begin rebuilding after one of the American | | | | anticipated to end by fall. |
| auto industry's biggest financial meltdowns, reported | | | | The News said that officials close to the transaction |
| the Detroit News. | | | | said that the earliest Delphi could emerge from |
| The pact, announced last Wednesday, keeps auto | | | | bankruptcy would be by the end of November. The |
| supplier Delphi on track to emerge from bankruptcy by | | | | only serious obstacle would be a protracted strike if |
| the end of the year. The agreement replaces a | | | | Detroit automakers fail to reach a pact on labor. Talks |
| previous $3.4 billion-worth deal that was discarded | | | | regarding the matter are set to begin this week. |
| when the Chrysler Group owner-to-be Cerberus | | | | The new deal is less than the initial offer because |
| Capital Management LP abandoned the plan in April. | | | | Delphi will pay out more to its unsecured creditors and |
| The new investment plan is backed by the Detroit | | | | reduce the number of shares that will be available to |
| automaker and Delphi's statutory committees, which | | | | current shareholders than in the initial plan, Delphi |
| represent shareholders and creditors. | | | | spokeswoman Claudia Piccinin said. |
| Compared to the original bid, the new one is reduced | | | | The investment group's stake in Delphi will range from |
| largely because creditors decided to take more equity | | | | 19 percent to 47 percent, depending on other investors |
| in Troy-based Delphi, rather than take cash. "We're | | | | number of acquired common stocks. Under the new |
| happy we got a consensual deal," said David Tepper, | | | | agreement, Appaloosa and other investors will acquire |
| the president and founder of New Jersey-based | | | | $800 million in convertible preferred shares and $175 |
| Appaloosa. "We look forward to working with | | | | million in Delphi common stock. It will acquire any |
| management and all the employees of Delphi." | | | | common shares left unsubscribed after a $1.6 billion |
| The deal with Appaloosa arrives a month after Delphi, | | | | rights offering to existing common stockholders. |
| its former parent General Motors Corp. and the United | | | | The investors also include Harbinger Capital Partners, |
| Auto Workers union entered a pact that gives Delphi | | | | Merrill Lynch, Pierce, Fenner & Smith Inc., UBS |
| workers cash payouts in lieu of wage and benefit | | | | Securities LLC, Pardus Capital Management LP, and |
| reductions. The agreement is deemed to be one of | | | | Goldman Sachs & Co. They will have a major say in |
| the key decisions needed to bring the company out of | | | | the reorganized company. A Saturn side marker blinks |
| bankruptcy. Appaloosa, Delphi's biggest shareholder | | | | differently because GM, Delphi's largest customer, |
| with a 9.3 percent stake, has been negotiating for | | | | opted to be an exception. |
| about a year to reach a deal to finance the company's | | | | If a post-bankruptcy Delphi is triumphant, it could serve |
| gruesome bankruptcy struggle. | | | | as a model for recuperating parts suppliers. "We're |
| "Today's equity purchase and commitment agreement | | | | starting to see things begin to happen - it's not been |
| represents additional progress in our transformation," | | | | easy, it's not been pretty and it's not done yet," said |
| said John Sheehan, the Delphi chief restructuring | | | | David Cole, the chairman of the Center for |
| officer. "Delphi is now focusing on reaching labor | | | | Automotive Research in Ann Arbor. "But we're |
| agreements with its remaining U.S. unions and finalizing | | | | beginning to see the skeleton of a structure of an |
| a settlement agreement with GM. We're pleased with | | | | industry that is in better balance with the economy. |
| our recent momentum." | | | | |